Looped Language Models (LoopLMs) perform "latent reasoning" by recursively refining internal latent representations with shared weights, offering a more effective alternative to explicit verbal reasoning. Despite their effectiveness, we find that LoopLMs remain prone to loop instability: unstable refinement across iterations can produce localized uncertain "hard" tokens associated with reasoning errors. To address this, we propose LoopCD, loop-wise contrastive decoding that enhances the reasoning performance of LoopLMs by intervening on these tokens at inference time. Specifically, we exploit the internal dynamics of LoopLMs and contrast the logits from earlier iterations with logits from the last refined iteration to form the final sampling distribution. We find that this strategy is highly efficient, introducing only negligible inference overhead and requiring no additional training, while effectively improving reasoning performance by naturally refining reasoning-critical hard tokens. Extensive experiments show that our method improves the performance of recent representative LoopLMs across various reasoning tasks.

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